SES Astra‘s Entavio initiative has suffered a blow with the news that ProSiebenSat.1 will not bring its free-to-air channels to Entavio due to antitrust concerns raised by the German government.

Entavio is SES Astra’s digital satellite infrastructure in Germany. The service will provide viewers in German-speaking regions of Europe a broader variety of TV programming, services such as interactive TV and electronic program guides, and video-on-demand, pay-per-view and personal video recorder services.

ProSiebenSat.1, one of Germany’s major broadcasters, houses some of Germany’s best- known TV channels, Sat.1, ProSieben, kabel eins and N24.

Kristof Samoy, a satellite equity analyst at KBC Securities, explained the background behind ProSiebenSat’s decision in a research note, "Last February, the competition watchdog warned the participation of both RTL and ProSiebenSat.1 on Entavio would seal off the satellite TV market and started investigating such a scenario," he said. "As a result, ProSiebenSat.1 preferred to await the Kartellamt’s (Cartel Office) ruling prior to decide on joining the platform. As time elapsed, ProSiebenSat.1 understood the Cartel Office would not approve participation and decided to stay out. This in turn made further investigations by the antitrust authority redundant."

Markus Payer, a spokesperson for SES Astra told Satellite News, "We have always said that the platform is open for all broadcasters and is designed to offer the them the largest possible range of technical features, allowing them to realize all possible business from encrypted free-TV to interactive services and the whole arena of pay-TV in its different forms. We have also always said that every broadcaster takes his own decision regarding the use of these services.

"The decision of ProSiebenSat.1 has led to the end of the Cartel Office investigations," Payer said. "This means that we can now proceed with Entavio Free-TV with our customers other than ProSiebenSat1. Entavio therefore continues in free and pay-TV, and we are committed to further develop the project. This is a project with a broad range and a mid- and long-term perspective. We remain committed to it."

TheProSiebenSat decision is a setback for Entavio, "but with RTL and MTV participating, potential for value creation still stands (albeit at probably lower levels than initially guided)," Samoy said.

Payer does not believe ProSiebenSat’s decision will have an impact on other broadcasters considering whether to participate in Entavio.

"We have seen a lot of interest in the market for Entavio in the last weeks and months, and there is strong political and regulatory support — except from the Cartel Office — for the project," Payer said. "Many people are aware that the market urgently needs such a model. We would therefore not exclude further signatures. However, we still have to work on the detailed planning and realization."

Contact, Markus Payer, SES Astra, e-mail, [email protected]

Aysha Zaman, Dresdner Kleinwort, e-mail, [email protected]

Kristof Samoy, KBC Securities, e-mail, [email protected]